# Tax - Property (GTP)

## Title 12. Recordation Taxes

### Subtitle 1

#### Section 12-101

(a) In this title the following words have the meanings indicated.

(b) "Articles of consolidation" means a document filed with the Department under Sec. 3-107 of the Corporations and Associations Article which evidences a consolidation of at least one Maryland corporation with another corporation to form a new Maryland corporation.

(c) "Articles of merger" means a document filed with the Department under Sec. 3-107, Sec. 4A-703, Sec. 9A-903, or Sec. 10-208 of the Corporations and Associations Article which evidences a merger involving at least one Maryland corporation, Maryland limited liability company, Maryland partnership, or Maryland limited partnership.

(d) "Documents which evidence the merger or consolidation of foreign corporations, foreign partnerships, foreign limited liability companies, or foreign limited partnerships" means those documents that are filed or recorded with:

  (1) the Department under Sec. 3-117, Sec. 4A-1012, Sec. 9A-910, or Sec. 10-912 of the Corporations and Associations Article; or

  (2) the clerk of the circuit court of a county evidencing that title to real property has been conveyed through a merger or consolidation of 2 or more foreign corporations, foreign limited liability companies, foreign partnerships, or foreign limited partnerships.

(e) "Domestic partner" means an individual with whom another individual has established a domestic partnership.

(f) "Domestic partnership" means a relationship between two individuals who:

  (1) are at least 18 years old;

  (2) are not related to the other by blood or marriage within four degrees of consanguinity under the civil law rule;

  (3) are not married or a member of a civil union or domestic partnership with another individual;

  (4) agree to be in a relationship of mutual interdependence in which each domestic partner contributes to the maintenance and support of the other domestic partner and the relationship, even if both domestic partners are not required to contribute equally to the relationship; and

  (5) share a common residence where both domestic partners live, even if:

    (i) only one of the domestic partners has the right to legal possession of the common residence; or

    (ii) one of the domestic partners has an additional residence.

(g) "Evidence of a domestic partnership" means:

  (1) an affidavit signed under penalty of perjury by two individuals stating that they have established a domestic partnership; and

  (2) evidence of any two of the following:

    (i) joint liability of the individuals for a mortgage or other loan or for a lease;

    (ii) the designation of one of the individuals as the primary beneficiary under a life insurance policy on the life of the other individual or under a retirement plan of the other individual;

    (iii) the designation of one of the individuals as the primary beneficiary of the will of the other individual;

    (iv) a durable power of attorney for health care or financial management granted by one of the individuals to the other individual;

    (v) joint ownership or lease by the individuals of a motor vehicle;

    (vi) a joint checking account, joint investments, or a joint credit account;

    (vii) a joint renter's or homeowner's insurance policy;

    (viii) coverage of one of the individuals under a health insurance policy of the other individual;

    (ix) joint responsibility for childcare, such as school documents or guardianship documents; or

    (x) a relationship or cohabitation contract.

(h) "Evidence of dissolution of a domestic partnership" means:

  (1) a death certificate; or

  (2) an affidavit signed under penalty of perjury by two individuals who formerly established a domestic partnership stating that the domestic partnership has been dissolved.

(i) "Former domestic partner" means an individual with whom another individual had established a domestic partnership that has subsequently been dissolved.

(j)

  (1) "Instrument of writing" means a written instrument that:

    (i) conveys title to or creates or gives notice of a security interest in real property; or

    (ii) creates or gives notice of a security interest in personal property.

  (2) "Instrument of writing" includes:

    (i) a deed or contract;

    (ii) a mortgage, deed of trust, or other contract that creates an encumbrance on real property;

    (iii) a lease of real property;

    (iv) an assignment of a lessee's interest in real property;

    (v) a security agreement;

    (vi) articles of merger or other document which evidences a merger of foreign corporations, foreign partnerships, foreign limited liability companies, or foreign limited partnerships; and

    (vii) articles of consolidation or other document which evidences a consolidation of foreign corporations.

(k) "Recordation tax" means the tax imposed under this title.

(l)

  (1) "Security agreement" means an agreement that creates or provides for a security interest.

  (2) "Security agreement" includes a financing statement filed under the Maryland Uniform Commercial Code to perfect a security interest.

(m)

  (1) "Security interest" means an interest in real property or personal property that secures payment or performance of an obligation.

  (2) "Security interest" includes a lien or encumbrance on real property or personal property.

(n) "Subsidiary corporation" includes any corporation that is a subsidiary of either a parent corporation or any other subsidiary corporation of the parent corporation.

(o) "Successor" has the meaning stated in Sec. 1-101(dd) of the Corporations and Associations Article.

(p)

  (1) "Supplemental instrument of writing" means an instrument of writing that confirms, corrects, modifies, supplements, or amends and restates a previously recorded instrument of writing, regardless of whether recordation tax was paid on such instrument of writing.

  (2) "Supplemental instrument of writing" includes an instrument of writing that secures a debt and grants a security interest in property in addition to or in substitution for property described in the previously recorded instrument of writing.

#### Section 12-102

Except as otherwise provided in this title, recordation tax is imposed on an instrument of writing:

(1) recorded with the clerk of the circuit court for a county; or

(2) filed with the Department and described in Sec. 12-103(d) of this title.

#### Section 12-103

(a)

  (1) Except as provided in subsection (a-1) of this section, the recordation tax rates under this section are applied to each $500 or fraction of $500 of consideration payable or of the principal amount of the debt secured for an instrument of writing.

  (2) The consideration:

    (i) includes the amount of any mortgage or deed of trust assumed by the grantee; and

    (ii) subject to item (i) of this paragraph, includes only the amount paid or delivered in return for the sale of the property and does not include the amount of any debt forgiven or no longer secured by a mortgage or deed of trust on the property.

(a-1)

  (1) The recordation tax rates under this section are applied to each $500 or fraction of $500 of consideration paid for the conveyance of a controlling interest in a real property entity as defined in Sec. 12-117 of this title that has developed real property under Section 42 of the Internal Revenue Code, the Low Income Housing Tax Credit Program.

  (2) The consideration under this subsection shall be the actual payment made by the purchaser to the seller for the purchase of the interest.

(b)

  (1) The Mayor and City Council of Baltimore City or the governing body of a county may set, by law, the recordation tax rate in the county.

  (2) The Mayor and City Council of Baltimore City or the governing body of a county may provide for an exemption from the tax of a specified amount of the consideration payable on the conveyance of owner-occupied residential property if the buyer intends to use the property as the buyer's principal residence by actually occupying the residence for at least 7 months of a 12-month period.

  (3) The governing body of a county or Baltimore City may provide for an exemption from the recordation tax for an instrument of writing for residentially improved owner-occupied real property if the instrument of writing is accompanied by a statement under oath signed by each grantee that:

    (i)

      (1) the grantee is an individual who has never owned in the State residential real property that has been the individual's principal residence; and

      (2) the residence will be occupied by the grantee as the grantee's principal residence; or

    (ii)

      (1) the grantee is a co-maker or guarantor of a purchase money mortgage or purchase money deed of trust as defined in Sec. 12-108(i) of this title for the property; and

      (2) the grantee will not occupy the residence as the co-maker's or guarantor's principal residence.

(c) The recordation tax rate is 55 cents for an instrument of writing for property that:

  (1) is located in 2 or more counties; and

  (2) is security for a corporate bond of a public service company as defined in Sec. 1-101 of the Public Utilities Article.

(d) For articles of merger or articles of consolidation filed with the Department under Sec. 3-107 of the Corporations and Associations Article, or other document filed with the Department which evidences a merger or consolidation of foreign corporations, foreign limited liability companies, foreign partnerships, or foreign limited partnerships, the recordation tax rate is $1.65. The Department shall collect the recordation tax when the articles of merger, articles of consolidation, or other document which evidences a merger or consolidation of foreign corporations, foreign limited liability companies, foreign partnerships, or foreign limited partnerships are filed.

#### Section 12-104

(a) Except as provided in subsection (b) of this section, the consideration payable, including the amount of any mortgage or deed of trust assumed by the grantee, or the principal amount of the secured debt incurred, shall be described in:

  (1) the recitals or the acknowledgment of the instrument of writing; or

  (2) an affidavit under oath that accompanies the instrument of writing and that is signed by a party to the instrument of writing or by an agent of a party.

(b) Security agreements filed in accordance with Sec. 9-502 of the Maryland Uniform Commercial Code are governed by the requirements of that section and not by subsection (a) of this section.

#### Section 12-105

(a)

  (1) For a deed, deed of trust, or mortgage transferring title to real property located partly in the State, the recordation tax applies to the consideration payable or the principal amount of the debt secured in the same ratio that the value of the real property that is located in the State bears to the value of the entire property.

  (2) For a security agreement covering personal property that is not exempt under Sec. 12-108(k) of this title and is located partly in this State, recordation tax applies to the principal amount of the debt secured in the same ratio that the value of the nonexempt personal property located in this State bears to the value of the entire personal property.

  (3) For transactions that involve instruments of writing described in both paragraphs (1) and (2) of this subsection, the recordation tax applies to the consideration payable or the principal amount of the debt secured in the same ratio that the sum of the values of the real property and the nonexempt personal property located in this State bears to the value of the entire property.

(b) Except if recorded with the Interstate Commerce Commission as provided by federal law, for a deed of trust, mortgage, or contract or agreement for the rolling stock or equipment of a railroad, the recordation tax applies to the debt secured in the same ratio that the number of miles of line of the railroad in the State bears to the number of miles of line of the entire railroad.

(c) If a lease of real property creating a perpetually renewable ground rent is recorded without a transfer of the reversionary estate for full consideration other than the ground rent being recorded at the same time, the recordation tax applies to the redemption sum as determined under Sec. 8-804 of the Real Property Article plus any additional consideration payable. If the lease is recorded at the same time with the transfer of the reversionary estate created for full consideration, the lease is not subject to recordation tax.

(d) For a lease of real property for a term of more than 7 years not perpetually renewable, the recordation tax applies to:

  (1) the average annual rent over the term of the lease, including renewals, capitalized at 10% plus any additional consideration payable, other than rent; or

  (2) if the average annual rent cannot be determined, the greater of:

    (i) 105% of the minimum average annual rent as determined by the lease, capitalized at 10% plus any additional consideration payable, other than rent; or

    (ii) 60% of the assessment of the real property subject to lease.

(e)

  (1) In this subsection, "document":

    (i) means any document that publicizes or gives constructive notice of an unrecorded lease; and

    (ii) includes:

      (1) an attornment agreement;

      (2) a memorandum of a lease; and

      (3) an assignment of a lease.

  (2) A document may be recorded only if the original lease is submitted and recordation tax on the document and the original lease is paid.

  (3) Subject to Sec. 12-111 of this title, the lessee is chargeable with recordation tax on the original lease. If a lessee fails or refuses to pay recordation tax after a demand is made, the party offering for recordation the original lease may:

    (i) pay recordation tax; and

    (ii) sue the lessee to recover the amount of recordation tax paid, with interest from the date of payment of recordation tax.

  (4) Recordation tax has to be paid on the original lease only if the original lease was required to be recorded under Sec. 3-101 of the Real Property Article.

(f)

  (1) Except as provided in paragraph (4) of this subsection, if the total amount of secured debt has not been incurred at the time of recording or filing the instrument of writing, the recordation tax applies only to the principal amount of the debt incurred at that time.

  (2) Except as provided in paragraphs (3), (4), and (6) of this subsection, on or before 7 days after any additional debt is incurred after recording or filing an instrument of writing, a statement under oath of the amount of additional debt shall be filed with the clerk of the circuit court or with the Department, and the recordation tax shall be paid on the additional debt by the debtor.

  (3) If the additional debt under paragraph (2) of this subsection is applied to repayment of the debt previously incurred, the recordation tax does not apply to the additional debt.

  (4) The recordation tax may be computed and paid on the maximum outstanding principal sum, however expressed, that is stated to be secured by the instrument of writing, without regard to the amount of secured debt actually incurred, advanced, or readvanced.

  (5) When credit is originally extended under paragraph (1) of this subsection to a consumer borrower, as defined in Sec. 12-901 of the Commercial Law Article, the lender shall inform the borrower that:

    (i) the borrower may pay the recordation tax under paragraphs (1) and (2) or paragraph (4) of this subsection; and

    (ii) if the borrower elects to pay the recordation tax as additional debt is incurred under paragraph (2) of this subsection, the consumer borrower is responsible for payment of the additional tax and any penalty provided by Sec. 14-1012 of this article.

  (6)

    (i) This paragraph applies to construction loans for over $100,000 for which the total amount of secured debt has not been incurred at the time of recording or filing the instrument of writing.

    (ii) At the time that additional debt is incurred, the lender shall issue a draft payable to the appropriate collector of the recordation tax in the amount of the recordation tax due under this subsection.

    (iii) The funds for the draft may be proceeds from the additional debt that is incurred or from the borrower.

    (iv) Until the recordation tax is paid as required under paragraph (2) of this subsection, the borrower shall remain liable for the recordation tax that is due on the additional debt.

  (7)

    (i) In this paragraph, "indemnity mortgage" includes any mortgage, deed of trust, or other security interest in real property that secures a guarantee of repayment of a loan for which the guarantor is not primarily liable.

    (ii) Except as provided in subparagraph (iii) of this paragraph:

      (1) secured debt with respect to an indemnity mortgage recorded on or after July 1, 2012, is deemed to be incurred for purposes of this subsection when and to the same extent as debt is incurred on the guaranteed loan; and

      (2) the recordation tax applies under this subsection in the same manner as if the guarantor were primarily liable for the guaranteed loan.

    (iii) This paragraph does not apply:

      (1) to the extent that recordation tax is paid on another instrument of writing that secures payment of the guaranteed loan;

      (2) to an indemnity mortgage that secures a guarantee of repayment of a loan or series of loans that are part of the same transaction for less than $12,500,000; or

      (3) to a supplemental instrument of writing that confirms, corrects, modifies, supplements, or amends and restates a previously recorded instrument of writing regardless of whether recordation tax was paid on the instrument of writing, to the extent of the outstanding principal balance of the guaranteed loan immediately prior to the time the supplemental instrument of writing is entered into.

    (iv) Recordation tax that is otherwise due on the recording of an indemnity mortgage may be allocated in the same manner described in subsection (a) of this section or calculated on the amount of the debt stated to be secured.

(g)

  (1) For a transfer under Sec. 12-106 of this title, the recordation tax applies to the value of the real property determined by the Department at the date of finality immediately before the date of transfer.

  (2) For a transfer by articles of merger, articles of consolidation, or other documents which evidence a merger or consolidation of foreign corporations, foreign limited liability companies, foreign partnerships, or foreign limited partnerships, the recordation tax applies to the value of the real property determined by the Department at the date of finality immediately before the date of the merger or consolidation.

#### Section 12-106

Except as provided in Sec. 12-108(p), (q), (v), and (w) of this title, the recordation tax applies to instruments of writing that transfer the real property of a corporation to its stockholders, the real property of a limited liability company to its members, or the real property of a partnership to its partners.

#### Section 12-107

Except as otherwise provided in this title, the recordation tax applies to an instrument of writing that perfects a security interest in tangible personal property, standing timber, or fixtures.

#### Section 12-108

(a)

  (1) Except as provided in paragraph (2) of this subsection, an instrument of writing is not subject to recordation tax, if the instrument of writing transfers property to or grants a security interest to:

    (i) the United States;

    (ii) the State;

    (iii) an agency of the State; or

    (iv) a political subdivision in the State.

  (2) The Mayor and City Council of Baltimore City or the governing body of a county may impose, by law, the recordation tax uniformly on all instruments of writing that secure repayment of debt created by the sale of bonds authorized under Title 12, Subtitle 1 of the Economic Development Article.

(b) A security agreement is not subject to recordation tax, if the security agreement is:

  (1) on a vehicle and is perfected by filing with the Motor Vehicle Administration; or

  (2) on a vessel and is perfected by filing with the Department of Natural Resources.

(c)

  (1) When property is transferred subject to a mortgage or deed of trust, the recordation tax does not apply to the principal amount of debt assumed by the transferee, if the instrument of writing transfers the property from the transferor to a:

    (i) spouse or former spouse;

    (ii) son, daughter, stepson, or stepdaughter;

    (iii) parent or stepparent;

    (iv) son-in-law, daughter-in-law, stepson-in-law, or stepdaughter-in-law;

    (v) parent-in-law or stepparent-in-law;

    (vi) brother, sister, stepbrother, or stepsister;

    (vii) grandchild or stepgrandchild;

    (viii) grandparent or stepgrandparent; or

    (ix) domestic partner or former domestic partner.

  (2)

    (i) To qualify as a domestic partner under this subsection, an individual shall submit evidence of a domestic partnership.

    (ii) To qualify as a former domestic partner under this subsection, an individual shall submit evidence of dissolution of a domestic partnership.

  (3) The exemption under paragraph (1) of this subsection for transfers to a domestic partner or former domestic partner of the transferor applies only to an instrument of writing for residential property.

(d)

  (1) An instrument of writing that transfers property between the following individuals is not subject to recordation tax:

    (i) spouses or former spouses; or

    (ii) domestic partners or former domestic partners.

  (2)

    (i) To qualify as a domestic partner under this subsection, an individual shall submit evidence of a domestic partnership.

    (ii) To qualify as a former domestic partner under this subsection, an individual shall submit evidence of dissolution of a domestic partnership.

  (3) The exemption under paragraph (1) of this subsection for transfers between domestic partners or former domestic partners applies only to an instrument of writing for residential property.

(e) A supplemental instrument of writing is not subject to recordation tax except to the extent that:

  (1) actual consideration is payable on the supplemental instrument of writing; or

  (2) the amount of unpaid outstanding principal debt is increased by the supplemental instrument of writing.

(f) An instrument of writing previously recorded is not subject to recordation tax when the instrument or a counterpart is recorded in another county or in the same county.

(g)

  (1) In this subsection, "original mortgagor" includes:

    (i) a person that assumed a debt secured by real property that the person purchased and paid the recordation tax on the consideration paid for the property;

    (ii) a person that received the property from the original mortgagor under a deed that was exempt from recordation tax under subsection (p) or (y) of this section; and

    (iii) the trustee of an inter vivos trust if the trustee or the settlor of the trust originally assumed or incurred the debt secured by the mortgage or deed of trust.

  (2) A mortgage or deed of trust is not subject to recordation tax to the extent that it secures the refinancing of an amount not greater than the unpaid principal amount secured by an existing mortgage, indemnity mortgage, or deed of trust at the time of refinancing if the mortgage or deed of trust secures the refinancing of real property that is:

    (i) being refinanced by the original mortgagor or by the original mortgagor and, if applicable, the spouse of the original mortgagor; or

    (ii) being refinanced by the settlor of an inter vivos trust if the mortgage or deed of trust is given by a trustee of the trust.

  (3) To qualify for an exemption under paragraph (2) of this subsection an original mortgagor or agent of the original mortgagor shall include a statement in the recitals or in the acknowledgment of the mortgage or deed of trust, or submit with the mortgage or deed of trust, an affidavit under oath, signed by the original mortgagor or agent of the original mortgagor, stating:

    (i) that the person is the original mortgagor or agent of the original mortgagor; and

    (ii) the amount of unpaid outstanding principal of the original mortgage, indemnity mortgage, or deed of trust that is being refinanced.

  (4) A statement under paragraph (3) of this subsection by an agent of the original mortgagor shall state that the statement:

    (i) is based on a diligent inquiry made by the agent with respect to the facts set forth in the statement; and

    (ii) is true to the best of the knowledge, information, and belief of the agent.

(h) An instrument of writing of a mechanic's lien or crop lien that relates to farm products or equipment used in farming operations is not subject to recordation tax.

(i)

  (1) In this subsection, "purchase money mortgage" or "purchase money deed of trust" means a mortgage or deed of trust that:

    (i) is given by the transferee of real property with respect to the property purchased;

    (ii) is delivered as part of the same transaction as the instrument of writing that transfers the property purchased and that is subject to the recordation tax;

    (iii) recites on its face that it secures, in whole or in part, the purchase money for the property or otherwise recites on its face that it is a purchase money mortgage or purchase money deed of trust;

    (iv) is fully executed within 30 days of the date that the instrument of writing transferring the property is fully executed; and

    (v) is recorded no later than 30 days after the date that the instrument of writing transferring the property is duly recorded.

  (2) For the purpose of this subsection, the date that an instrument is fully executed is the later of:

    (i) the date of the last acknowledgment; or

    (ii) the date on the instrument of writing.

  (3) A purchase money mortgage or a purchase money deed of trust is not subject to recordation tax.

(j) An assignment of a mortgage or deed of trust is not subject to recordation tax.

(k) A security agreement filed or recorded under the Maryland Uniform Commercial Code is not subject to recordation tax:

  (1) if it is filed or recorded:

    (i) to perfect a security interest in inventory;

    (ii) to perfect a security interest in contract rights, general intangibles, or accounts;

    (iii) to perfect a security interest in farm products or in equipment used in farming operations;

    (iv) to perfect a security interest taken or retained by a seller of collateral to secure all or part of its price; or

    (v) to publicize a lease of goods or fixtures, provided that the security agreement states on its face that it does not create a security interest; or

  (2) if it is filed or recorded with the Department under Sec. 9-501(a)(2) of the Commercial Law Article.

(l) A judgment of a court is not subject to recordation tax.

(m) A release is not subject to recordation tax.

(n) An order of satisfaction is not subject to recordation tax.

(o) A participation agreement that shows an interest of a person in a note, mortgage, or deed of trust that is based on a previously recorded loan to the mortgagor or grantor under a deed of trust is not subject to recordation tax.

(p)

  (1)

    (i) In this subsection the following words have the meanings indicated.

    (ii) "Business entity" means a limited liability company, corporation, limited partnership, or statutory trust.

    (iii) "Owner" means a member, stockholder, limited partner, or beneficial owner of a business entity.

    (iv) "Ownership interest" means a membership interest, stock, limited partnership interest, or beneficial interest.

  (2) An instrument of writing is not subject to recordation tax if the instrument of writing is:

    (i) a transfer of title to real property between a parent business entity and its wholly owned subsidiary business entity or between 2 or more subsidiary business entities wholly owned by the same parent business entity, if the parent business entity is an original owner of the subsidiary business entity, or became an owner through gift or bequest from an original owner of the subsidiary business entity, for:

      (1) no consideration;

      (2) nominal consideration; or

      (3) consideration that comprises only the issuance, cancellation, or surrender of the ownership interests of a subsidiary business entity;

    (ii) an instrument of writing made pursuant to the reorganization of a business entity as described in Sec. 368(a) of the Internal Revenue Code; or

    (iii) a transfer of title to real property from a subsidiary business entity to its parent business entity for no consideration, nominal consideration or consideration that comprises only the issuance, cancellation, or surrender of a subsidiary's ownership interest, where the parent business entity:

      (1) previously owned the real property;

      (2) currently owns the ownership interest of the subsidiary and has owned that ownership interest for a period greater than 18 months; or

      (3) acquires the ownership interest of a subsidiary business entity which has been in existence and has owned the real property for a period of 2 years.

(q) An instrument of writing that transfers real property from a corporation, limited liability company, or partnership on its liquidation, dissolution, or termination is not subject to recordation tax, if the transferee is:

  (1) an original stockholder of the corporation, an original member of the limited liability company, or an original partner of the partnership;

  (2) a direct descendant or relative within 2 degrees of an original stockholder of the corporation, an original member of the limited liability company, or an original partner of the partnership counting by the civil law method; or

  (3) a stockholder, member, or partner who became a stockholder, member, or partner through gift or bequest from an original stockholder of the corporation, an original member of the limited liability company, or an original partner of the partnership.

(r) A land installment contract described in Sec. 10-101(c) of the Real Property Article is not subject to recordation tax.

(s) An option agreement for the purchase of real property is not subject to recordation tax.

(t) A deed conveying title to real property is not subject to recordation tax if recordation tax was paid on a prior contract of sale between the same parties for the real property.

(u) A lease of 7 years or less, which is not required to be recorded under Sec. 3-101 of the Real Property Article, is not subject to recordation tax.

(v) Articles of merger or other document which evidences a merger of foreign corporations are not subject to recordation tax if there is a transfer of real property:

  (1) from a parent corporation to its subsidiary corporation;

  (2) from a subsidiary corporation to its parent corporation where the parent corporation:

    (i) previously owned the real property;

    (ii) owns the stock of the subsidiary and has owned that stock for a period greater than 18 months; or

    (iii) acquires the stock of a subsidiary corporation which has been in existence and has owned the real property for a period of 2 years; or

  (3) from a corporation merging out of existence to its successor corporation where recordation tax and, if then required to have been paid, transfer tax were paid when the corporation merging out of existence acquired title to the real property.

(w) Articles of consolidation or other documents that evidence a consolidation of foreign corporations are not subject to recordation tax if recordation tax and, if then required to have been paid, transfer tax were paid when the corporation consolidating to form a new corporation acquired title to the real property.

(x)

  (1) Except as provided in this subsection, an instrument of writing that transfers real property from a cooperative housing corporation on its termination to an owner of a cooperative interest in the cooperative housing corporation is not subject to recordation tax if the cooperative housing corporation consists of single residential units and was established on or before January 1, 1970.

  (2) The exemption under paragraph (1) of this subsection does not apply to:

    (i) the conversion of a cooperative housing corporation to a condominium regime; or

    (ii) the transfer of property to a person who:

      (1) does not occupy the property transferred; or

      (2) has received the credit allowed under this section for another property transferred as part of the same corporate termination.

  (3) The exemption under paragraph (1) of this subsection shall apply only in a county that:

    (i) does not levy a county property transfer tax; or

    (ii) has, by law, adopted an exemption from any local transfer tax for property as described in this subsection.

(y)

  (1)

    (i) In this subsection the following words have the meanings indicated.

    (ii) "Foreign general partnership", "foreign limited partnership", "foreign limited liability partnership", "foreign limited liability limited partnership", and "foreign joint venture" mean, respectively, a partnership, limited partnership, limited liability partnership, limited liability limited partnership, or joint venture organized or formed under the laws of the United States, another state of the United States, or a territory, possession, or district of the United States.

    (iii) "Predecessor entity" includes a:

      (1) Maryland general partnership or foreign general partnership;

      (2) Maryland limited partnership or foreign limited partnership;

      (3) Maryland limited liability partnership or foreign limited liability partnership;

      (4) Maryland limited liability limited partnership or foreign limited liability limited partnership;

      (5) Maryland joint venture or foreign joint venture; and

      (6) sole proprietorship.

    (iv) "Sole proprietorship" includes an individual who owns an interest in real property in the individual's name.

  (2) An instrument of writing that transfers title to real property from a predecessor entity or a trustee or nominee of a predecessor entity to a limited liability company is not subject to recordation tax if:

    (i)

      (1) the members of the limited liability company are identical to the partners of the converting general partnership, limited partnership, limited liability partnership, or limited liability limited partnership;

      (2) the members of the limited liability company are identical to the joint venturers of the converting joint venture; or

      (3) the sole member of the limited liability company is identical to the converting sole proprietor;

    (ii) each member's allocation of the profits and losses of the limited liability company is identical to that member's allocation of the profits and losses of the converting predecessor entity; and

    (iii) the instrument of writing that transfers title to real property represents the dissolution of the predecessor entity for purposes of conversion to a limited liability company.

(z) Expired.

(aa) An instrument of writing pursuant to which the Maryland Stadium Authority transfers title to, or creates a leasehold interest in, real property is not subject to recordation tax if the transferee or lessee is an Authority affiliate as defined in Sec. 10-601 of the Economic Development Article.

(bb)

  (1) In this subsection, "real estate enterprise" means a business conducted by one or more individuals who own real property, including a sole proprietorship or a tenancy by the entirety, and are principally involved in buying, selling, leasing, or managing real property.

  (2) An instrument of writing that transfers title to real property from the individual or individuals conducting a real estate enterprise to a limited liability company is not subject to recordation tax if:

    (i) the transfer is for no consideration other than the issuance of membership interests in the limited liability company;

    (ii) the members of the limited liability company are identical to the partners of the conveying real estate enterprise;

    (iii) each member's allocation of the profits and losses of the limited liability company is identical to that member's allocation of the profits and losses of the conveying real estate enterprise;

    (iv) the transfer is part of a discontinuation of the real estate enterprise; and

    (v) all real property owned by the individuals and used in the conduct of any real estate enterprise is being conveyed to a single limited liability company.

  (3) An individual's other business interests unrelated to the real estate enterprise and unaffected by the title transfer to a limited liability company may not affect the individual's ability to claim the exemption from the recordation tax described in this subsection.

(cc)

  (1)

    (i) In this subsection the following words have the meanings indicated.

    (ii) "Conservation easement" means a restriction prohibiting or limiting the use of water or land areas, or any improvement or appurtenance thereto, described in Sec. 2-118 of the Real Property Article.

    (iii) "Land trust" means a qualified conservation organization that:

      (1) is a qualified organization under Sec. 170(h)(3) of the Internal Revenue Code and regulations adopted under that section; and

      (2) has executed a cooperative agreement with the Maryland Environmental Trust.

  (2) An instrument of writing conveying or assigning a conservation easement to a land trust is not subject to recordation tax.

  (3) An instrument of writing conveying fee simple title to a land trust is not subject to recordation tax if the land trust files a declaration of intent that the land will be used:

    (i) to assist in the preservation of a natural area;

    (ii) for the environmental education of the public;

    (iii) to conserve agricultural land and to promote continued agricultural use of the land;

    (iv) generally to promote conservation; or

    (v) for the maintenance of a natural area for public use or a sanctuary for wildlife.

(dd) An instrument of writing that transfers real property or an interest in real property from an estate is not subject to recordation tax as provided in Sec. 9-105(c) of the Estates and Trusts Article.

(ee) An instrument of writing that transfers real property or an interest in real property to a trust or from a trust to one or more beneficiaries under the circumstances specified in Sec. 14.5-1001 of the Estates and Trusts Article is not subject to recordation tax.

(ff) An instrument of writing that transfers residential real property from a certified community development financial institution to the immediately preceding mortgagor or grantor of the property under the circumstances specified in Sec. 7-105.1 of the Real Property Article and a purchase money mortgage or purchase money deed of trust related to that transfer are not subject to recordation tax.

(gg) An instrument of writing that transfers residential real property is not subject to recordation tax if:

  (1) the property is subject to a purchase money mortgage or purchase money deed of trust;

  (2) the mortgagor filed a petition for bankruptcy under Title 11, Chapter 7 of the United States Code;

  (3) the mortgagor filed with the bankruptcy court a statement of intention to surrender the property;

  (4) the property was the principal residence of the mortgagor prior to the surrender of the property in bankruptcy; and

  (5) the property is transferred from the mortgagor to the holder of the purchase money mortgage or purchase money deed of trust.

(hh)

  (1) In this subsection, "MJC Entities", "Pimlico racing facility site", "Pimlico site", "project entities", and "training facility site" have the meanings stated in Sec. 10-601 of the Economic Development Article.

  (2) An instrument of writing is not subject to recordation tax if the instrument of writing transfers or grants a security interest in property that is:

    (i) located at or within the Pimlico racing facility site, Pimlico site, or training facility site and the transfer or grant is by any combination of project entities, MJC Entities, Baltimore City, or an entity designated by Baltimore City; or

    (ii) the property identified as the Bowie Race Course Training Center under Sec. 11-519 of the Business Regulation Article that is transferred by the owner of the property to a government entity.

(ii) A real property transfer-on-death deed under Title 14 of the Real Property Article is not subject to recordation tax if the property is a primary residence or a secondary residence of the transferor.

#### Section 12-109

(a)

  (1) An instrument of writing that is taxable under this title may not be recorded in any county until the recordation tax has been paid as provided by subsection (b) of this section.

  (2) An instrument of writing that is taxable under this title may not be filed with the Department until the recordation tax has been paid as provided by subsection (b) of this section.

(b)

  (1) Except as provided in paragraph (2) of this subsection, the recordation tax on an instrument of writing or a security agreement recorded under subsection (a)(1) of this section in any county shall be paid to the collector or the clerk of the circuit court for the county, as designated by the governing body of the county.

  (2) In Prince George's County, the recordation tax on an instrument of writing or a security agreement recorded under subsection (a)(1) of this section shall be paid to the Director of Finance of Prince George's County.

  (3) The recordation tax on articles of merger, articles of consolidation, or other documents which evidence a merger or consolidation of foreign corporations, foreign partnerships, foreign limited liability companies, or foreign limited partnerships filed with the Department shall be paid to the Department.

#### Section 12-110

(a)

  (1) Except as provided in subsections (c) and (d) of this section, in any county except Prince George's, the recordation tax collected by the collector or the clerk of the circuit court shall be paid to the governing body of the county in which the recordation tax was collected.

  (2) In Prince George's County the recordation tax is both paid to and collected by the Director of Finance of Prince George's County.

(b)

  (1) A person who offers for recordation an instrument of writing for property located in 2 or more counties shall submit to the collector or the clerk of the circuit court for each county a certificate showing the apportionment of the total value of the property between each of the counties.

  (2) For an instrument of writing recorded under paragraph (1) of this subsection, the recordation tax in each county in which the property is located is:

    (i) payable at the rate of tax that applies in the county; and

    (ii) based on the ratio that the value of the property in that county bears to the value of the property in all counties.

(c) Recordation tax collected under Sec. 12-103(c) of this title shall be paid to the Comptroller for deposit in the General Fund of the State.

(d)

  (1) The Department shall deduct the cost of administering the recordation tax from the taxes collected under this title and credit those revenues to the fund established under Sec. 1-203.3 of the Corporations and Associations Article.

  (2) After deducting the revenues required under paragraph (1) of this subsection, the recordation tax collected under Sec.Sec. 12-103(d) and 12-117 of this title shall be distributed to the county in which the property is located.

#### Section 12-111

By agreement, recordation tax may be paid by any person.

#### Section 12-112

The Department may adopt regulations to administer the collection and remitting of recordation tax for instruments of writing filed with the Department.

#### Section 12-113

(a) In Harford County the collector shall deposit proceeds from recordation tax at the rate of $2.20 in a special capital improvement fund to be used to pay school bonds issued on the faith and credit of Harford County after January 1, 1959. After the debt service for the current fiscal year has been met, the money collected from this tax at the rate of $2.20 shall be credited for the purpose of financing:

  (1) new school construction;

  (2) major improvements and capital improvements to existing school facilities;

  (3) portable classrooms; or

  (4) any combination of these purposes.

(b) In Harford County the collector shall deposit proceeds from recordation tax at the rate of 55 cents in a fund for open-spaces land and recreation to be disbursed as authorized by the governing body of the county:

  (1) to purchase park lands and develop park and recreation facilities as separate units or as a part of a public school facility;

  (2) to pay loans made for the purposes of item (1) of this subsection;

  (3) to match any funds provided for the purposes of item (1) of this subsection by any municipal corporation in the county, subject to an agreement between the county and the municipal corporation; or

  (4) to construct a new headquarters facility in the immediate vicinity of the alms housekeeper's residence on Tollgate Road, if the architectural integrity of the housekeeper's residence is not affected by the construction.

#### Section 12-114

(a) In this section, "rental dwelling" means residential real property with accommodations for not more than 4 units that is held by the owner primarily for rental, investment, or the generation of income and is located in a targeted area designated by the governing body of Charles County under Sec. 9-310(c) of this article.

(b) The governing body of Charles County may grant, by law, an exemption, in whole or in part, from the recordation tax imposed on an instrument of writing that transfers a rental dwelling in Charles County to an individual who will occupy the property as a principal residence.

(c) To qualify for the exemption authorized under this section, the instrument of writing shall be accompanied by:

  (1) a statement under oath signed by the grantor that the property has been held by the grantor as a rental dwelling; and

  (2) a statement under oath signed by the grantee that the residence will be occupied by the grantee as the grantee's principal residence.

(d) The governing body of Charles County may provide by law for:

  (1) any additional criteria for eligibility, conditions, or restrictions for an exemption provided under this section;

  (2) provisions to define, fix, or limit the amount, terms, and scope of an exemption provided under this section; and

  (3) any other provision appropriate to implement the exemption.

#### Section 12-115

(a) The governing body of Charles County may grant, by law, a credit, in whole or in part, against the recordation tax imposed on an instrument of writing which transfers property in Charles County to targeted businesses relocating, expanding, or undertaking new construction in Charles County.

(b) The law adopted under subsection (a) of this section shall specify:

  (1) the criteria for eligibility for the tax credit;

  (2) any desired conditions or restrictions on the granting of the credit; and

  (3) the method for calculating the amount of the tax credit.

#### Section 12-116

The Mayor and City Council of Baltimore City or the governing body of a county may exempt, by law, from the recordation tax an instrument of writing that transfers property from or grants a security interest from:

(1) the United States;

(2) the State;

(3) an agency of the State; or

(4) a political subdivision in the State.

#### Section 12-117

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Controlling interest" means:

    (i) more than 80% of the total value of all classes of stock of a corporation;

    (ii) more than 80% of the total interest in capital and profits of a partnership, association, limited liability company, or other unincorporated form of doing business; or

    (iii) more than 80% of the beneficial interest in a trust.

  (3) "Final transfer" means that transfer of any portion of a controlling interest that completes the transfer of a controlling interest in a real property entity.

  (4)

    (i) "Plan of transfer" means an intentional plan or program to transfer the controlling interest in a real property entity.

    (ii) "Plan of transfer" does not include a series of sales of shares of a publicly traded entity.

  (5)

    (i) "Real property" means real property located in the State.

    (ii) "Real property" does not include:

      (1) a leasehold, unless created by a lease that is required to be recorded under Sec. 3-101(a) of the Real Property Article; or

      (2) any mortgage, deed of trust, or other lien on or security interest in real property that secures an indebtedness.

  (6)

    (i) "Real property entity" means a corporation, partnership, association, limited liability company, limited liability partnership, other unincorporated form of doing business, or trust that directly or beneficially owns real property that:

      (1) constitutes at least 80% of the value of its assets; and

      (2)

        (A) has an aggregate value of at least $1,000,000; or

      (B) is the product of an untaxed conversion from a sole proprietorship effected under the exemption provided under Sec. 12-108(y) of this title.

    (ii) For the purposes of this paragraph, the value of real property shall be determined without reduction for any mortgage, deed of trust, or other lien on or security interest in the real property.

    (iii) "Real property entity" does not include an entity with land holdings that, other than homesites or areas of commercial activity related to agricultural production, are entirely subject to an agricultural use assessment under Sec. 8-209 of this article.

(b)

  (1) The recordation tax is imposed on the transfer of a controlling interest in a real property entity as if the real property, directly or beneficially owned by the real property entity, was conveyed by an instrument of writing that is recorded with the clerk of the circuit court for a county or filed with the Department under Sec. 12-102 of this title.

  (2)

    (i) The recordation tax is imposed on the consideration payable for the transfer of the controlling interest in the real property entity.

    (ii) The consideration to which the recordation tax applies includes the amount of:

      (1) any mortgage, deed of trust, or other lien on or security interest in the real property directly or beneficially owned by the real property entity; and

      (2) any other debt or encumbrance of the real property entity.

    (iii) The consideration to which the recordation tax applies is reduced by the amount allocable to the assets of the real property entity other than real property.

    (iv) The real property entity has the burden of establishing to the satisfaction of the Department the consideration referred to in subparagraph (i) of this paragraph and the amount of any consideration allocable to assets other than real property referred to in subparagraph (iii) of this paragraph.

    (v) If the real property entity fails to establish the amount of consideration referred to in subparagraph (i) of this paragraph, the recordation tax is imposed on the value of the real property, directly or beneficially owned by the real property entity, determined by the Department at the date of finality immediately before the date of the final transfer.

  (3) Except as otherwise provided in Sec. 12-103(d) of this title, the recordation tax is applied at the rate set under Sec. 12-103(b) of this title by the county where the real property is located.

(c)

  (1)

    (i) Except as provided in subparagraph (ii) of this paragraph, the transfer of a controlling interest in a real property entity is not subject to recordation tax if the transfer of the real property owned by the real property entity between the same transferor and transferee of the controlling interest and under the same circumstances would have been exempt under Sec. 12-108 of this title.

    (ii) Subparagraph (i) of this paragraph does not apply to transactions under Sec. 12-108(y)(2)(i)3 of this title.

  (2) The recordation tax is not imposed on the transfer of a controlling interest in a real property entity effected in more than one transaction if:

    (i) the transfer is completed over a period of more than 12 months; or

    (ii) the transfer is not made in accordance with a plan of transfer.

  (3) The recordation tax is not imposed on the transfer of a controlling interest in a real property entity if the ownership interests in the real property entity are owned, directly or indirectly, by the same persons and in the same proportions after the transfer.

  (4) The recordation tax is not imposed on the transfer of a controlling interest in a real property entity if the transferee of the controlling interest in the real property entity is:

    (i) a nonstock corporation organized under Title 5, Subtitle 2 of the Corporations and Associations Article; and

    (ii) registered with the Department of Aging as a continuing care retirement community under Sec. 10-408 of the Human Services Article.

  (5) The real property entity has the burden of establishing to the satisfaction of the Department the applicability of any exemption referred to in paragraphs (1) through (4) of this subsection.

(d)

  (1) The real property entity shall file with the Department a report of any transfer of a controlling interest in the real property entity that is completed within a period of 12 months or less within 30 days following the date of the final transfer.

  (2) The report shall include all information to establish to the satisfaction of the Department:

    (i) the consideration referred to in subsection (b)(2)(i) of this section;

    (ii) the amount of assets other than real estate referred to in subsection (b)(2)(ii) of this section; and

    (iii) any exemption provided for in subsection (c) of this section.

  (3) The report shall be accompanied by payment of:

    (i) a $20 filing fee; and

    (ii) any tax, interest, and penalty that is due.

(e)

  (1) If any tax due under this section remains unpaid for 30 days after the date of the final transfer:

    (i) interest on the unpaid amount shall accrue thereafter at the rate of 1% per month; and

    (ii) a penalty of 10% of the unpaid amount shall be due.

  (2) Any tax, interest, and penalty due under this section is an obligation of the real property entity.

  (3) For reasonable cause, the Department may waive the imposition of interest or penalty.

(f) This section does not apply to:

  (1) a pledge of stock or other interest in a real property entity as security for a loan; or

  (2) the admission to the real property entity of additional shareholders, partners, beneficial owners, or other members incident to the raising of additional capital through a public or private offering of stock or other interests in the real property entity if:

    (i) the effective management of the real property entity is not substantially changed; and

    (ii) under the terms of the offering, none of the new members is expected to participate in the day-to-day management of the real property entity.

(g)

  (1) The Department shall adopt regulations to administer this section.

  (2) The regulations shall include any additional standards and exemptions to assure that:

    (i) a tax is imposed when a transaction is structured involving a controlling interest in a real property entity to avoid payment of the recordation tax;

    (ii) exemptions provided by law when real property is transferred by an instrument of writing are applicable; and

    (iii) there is no double taxation of a single transaction.

#### Section 12-118

(a)

  (1) In this subsection the following words have the meanings indicated.

  (2) "Acquired dwelling" means a dwelling:

    (i) that was owned by a displaced homeowner; and

    (ii) that by negotiation or condemnation was acquired from the displaced homeowner for public use by the State or a political subdivision or instrumentality of the State, where the acquiring agency had the power to acquire the dwelling for public use by condemnation.

  (3) "Acquisition year" means the taxable year in which an acquired dwelling was acquired for public use by the State or a political subdivision or instrumentality of the State.

  (4) "Awarded compensation" means the amount awarded to the displaced homeowner from the acquiring agency when the State or a political subdivision or instrumentality of the State took possession of the acquired dwelling by negotiation or condemnation.

  (5) "Displaced homeowner" means an individual whose legal interest in a dwelling was terminated through either negotiation or condemnation in exchange for awarded compensation.

  (6) "Replacement dwelling" means a dwelling that is:

    (i) purchased by a displaced homeowner within 2 taxable years immediately following the acquisition year; and

    (ii) is intended to be used as the principal residence of the displaced homeowner.

(b) The Mayor and City Council of Baltimore City or the governing body of a county may exempt, by law, from the recordation tax an instrument of writing that transfers title to improved residential real property to a displaced homeowner if the improved residential real property conveyed to the displaced homeowner qualifies as a replacement dwelling.

#### Section 12-119

On or before July 1, 2025, and each July 1 thereafter, the collector or the clerk of the circuit court for the county, whichever is designated to collect recordation tax for the county, shall submit a report, in accordance with Sec. 2-1257 of the State Government Article, to the Senate Budget and Taxation Committee and the House Ways and Means Committee that includes, for the immediately preceding fiscal year: 

(1) the total number of indemnity mortgages recorded that were exempt from recordation tax under Sec. 12-105(f)(7)(iii)2 of this title;

(2) the amount of debt secured by each indemnity mortgage that was exempt from recordation tax under Sec. 12-105(f)(7)(iii)2 of this title; and

(3) the amount of recordation tax revenue forgone due to the indemnity mortgage exemption from recordation tax under Sec. 12-105(f)(7)(iii)2 of this title.

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Md. Code Ann., Tax-Prop. (as displayed at mgaleg.maryland.gov, October 16, 2026)